June 25, 2016

The Gig Economy: OK If the Profits Went to the Giggers

There's nothing inherently wrong with the idea of working a job here and a job there according to the worker's convenience and other activities. The problem is that the profits go to some centralized corporation rather than being spread out among all the giggers in proportion to their participation in the system. If Uber or Lyft were a co-op, the profits would go to all the worker/owners instead of a handful of investors. Then the gig economy would offer not only a technique for working at one's convenience and fitting into one's schedule whether that schedule might be educational or child care or surfing or whatever. In other words making up one's own work schedule so it fits into your life is not a bad thing as long as the enterprise is co-operatively owned and provides not only convenience but worker protections.

It used to be only musicians comprised the "gig" economy. But there have always been self-employed people that worked gig to gig. Self-employed are the only really free people in the sense that they don't have to take orders from any boss, from any employer. If they want to take time off, the only person they need to consult is themselves. Especially if they have a large customer base, no single person or entity controls them. If they don't like a particular customer they can tell them to take a hike and vice versa. The power in the economy is equally distributed. This is the only really free market as far as workers are concerned. You don't have to kiss the boss's ass. And you can retire or not retire when you want to rather than when your boss tells you to. Did I mention that you can't be laid off, let go, downsized or outsourced?

Computer Technology Takes Self-Employment to the Next Level

Today computer technology takes self-employment to the next level, but it does not necessarily empower the worker in the gig economy. Uber has opened one door, but there are many other doors to be opened. Shift scheduling software for nurses has been in use for a few years. This technology can not only track each participant's schedule, but integrate those schedules so that necessary work is covered and everyone gets a fair shake. That means that no one is always scheduled for the night shift. Scheduling software then takes on a primary role in covering worker participation in such a way as the job or jobs get done. With Uber and Lyft there is no scheduling software per se. Everyone just works whenever they want so that at times there may be an oversupply of available drivers, and at other times there may be none available. Their software just tracks who has worked where and at what times as well as how many fares they've driven and for what amounts. They also set the price depending on demand, so-called dynamic pricing.

It's OK to price gouge the customer if demand is high, and multiple drivers are incentivized to drop what they're doing and pick up some fares. Similarly, when demand is low, the price comes down and customers are incentivized to hire an Uber even though there may be none available because drivers are disincentivized. Adjusting consumer and driver demand is a problem that supposedly Uber is in the process of solving. Supply and demand maladjustments are part and parcel of capitalism. They're a problem that capitalists seek to profit from rather than solve.

... providers don’t have to commit to full days of work. You can pick up your kids from school (and then switch to being an Uber driver). In the gig economy, the lines between personal and professional become increasingly blurred.

There’s certainly something empowering about being your own boss. With the right mindset, you can achieve a better work-life balance. But there’s also something empowering about a steady pay cheque, fixed work hours and company-provided benefits. It’s harder to plan your life longer term when you don’t know how much money you’re going to be making next year.

On the other hand, starting a new business has generally been an all-or-nothing proposition, requiring a significant appetite for risk. There are benefits to dipping your toes into the entrepreneurial waters by experimenting with a few gigs on the side. Perhaps this lowering of barriers to entrepreneurship will spur innovation across the economy.

Economist Thomas Piketty tells us that the main driver of sustained economic inequality over the past two centuries has been the concentration of wealth-producing “capital” in the hands of a few. This seems less likely if the economy is powered by millions of micro-entrepreneurs who own their businesses, rather than a small number of giant corporations.

But the latest generation of specialised labour platforms also raises the spectre of greater social inequality. We’ve now got apps through which providers will park your car (Luxe), buy and deliver your groceries (Instacart), and get you your drinks (Drizly). There’s a risk we might devolve into a society in which the on-demand many end up serving the privileged few.

In many countries, key slices of the social safety net are tied to full-time employment with a company or the government. Although the broader socioeconomic effects of the gig economy are as yet unclear, it is clear we must rethink the provision of our safety net, decoupling it from salaried jobs and making it more readily available to independent workers.

Shift Selection Software Allows Employees to Set Their Own Schedules

But there is another way of looking at the situation if Uber or something like Uber were to be a co-op instead of a corporation whose main concern was profits. What if prices for the consumer were held constant and drivers were incentivized to meet demand whatever that demand might be? With a co-op undesirable shifts might command a higher hourly paycheck and popular shifts might be paid at a lower hourly rate, but all would share in the profits commensurate with their total hours of work or participation. Software is smart enough to figure all this out. We don't have to hold on to the model of the 40 hour workweek for a corporate employer.

Worker protections ideally would be offered not by individual employers, but by society at large meaning the government. Universal health care would preempt workers' compensation insurance which would be moot. Family leave and vacations and whatever else is thought to be fair and desirable would presumably be offered in a co-op since it wouldn't be at odds with company profits which after all would be distributed among the workers according to some formula, but could be doubly guaranteed by society-at-large as well. There would be no conflict between workers and owners because the workers would be the owners so unions would be unnecessary. Call me a dreamer.

Politonomics is a methodology for deciding how to distribute work and compensation for work in such a way that maximizes worker satisfaction. The idea is not to maximize profits for shareholders or corporate CEOs and other executives, but how to maximize worker satisfaction which includes compensation for hours worked, worker protections and a share of the profits. The worker/owners would have democratic participation in decision making such as workers in German corporations have.

There is a clear legal basis in Germany for the workplace representation of employees in all but the very smallest companies. Under the Works Constitution Act, first passed in 1952 and subsequently amended, most recently in 2001, a works council can be set up in all private sector workplaces with at least five employees. (There is a system of staff councils in the public sector which have a broadly similar structure.)

Simply put, a cooperative is a special form of business owned and managed by the people who provide and/or use the goods and services that the business provides. They pool resources to satisfy a common need and provide these goods and services as economically and efficiently as possible. A co-op is owned by the people who use it.

As locally owned businesses, co-ops are committed to the people they serve and the communities they live in. Owners can have a voice in what is available for purchase, as well as in the overall organization of their particular co-op. Owners get the most buying power for their money, and the money stays in the community, contributing to its economic strength.

My interest began back in 1977, when a big steel company, Youngstown Sheet and Tube, went out of business. Five thousand people in Youngstown, Ohio, lost their jobs in one day, which was disastrous. Layoffs of that size are common today—especially when multinational corporations shift capital around—but in 1977 that was front-page, national news. It was a big, big deal.

But the community leaders and steel workers in Youngstown decided that they didn’t have to go down without a fight. They got together and built a coalition to buy the steel mill back and run it themselves, under worker-community ownership. They began organizing locally and statewide, and soon the Carter administration agreed to provide funds to hire experts who could help them with the mill’s technical designs.

New Models for Ownership and Employment

We have to think in terms of new models for ownership and for employment. Increasing economic inequality demands a solution.Co-ops are that solution. The old model of workers in competition with owners which gave rise to the union movement is or should be passe, and in its place should be a model in which workers are owners, unions are unnecessary and worker protections are guaranteed by the co-op itself and by society in general. The gig economy could be a good thing in terms of work schedule convenience and integration of work with other life enhancing and/or demanding activities.

Child care and elder care can be integrated into one's work schedule and time off is at the worker's scheduling disposal instead of being mandated as holidays or weekends or vacation by the corporate owners. Many workers would choose to take vacations when roads are less crowded than they are on mandated holidays. Today there is nothing sacrosanct about not working on Sunday or holidays as there used to be. The 40 hour work week should be a thing of the past with workers working as many hours as they choose on whatever days they choose without being exploited. Workers can set their own schedules and decide when their vacations should be instead of having to ask the permission of their bosses. And they wouldn't have to worry about their jobs being shipped to China.

Comments

There's nothing inherently wrong with the idea of working a job here and a job there according to the worker's convenience and other activities. The problem is that the profits go to some centralized corporation rather than being spread out among all the giggers in proportion to their participation in the system. If Uber or Lyft were a co-op, the profits would go to all the worker/owners instead of a handful of investors. Then the gig economy would offer not only a technique for working at one's convenience and fitting into one's schedule whether that schedule might be educational or child care or surfing or whatever. In other words making up one's own work schedule so it fits into your life is not a bad thing as long as the enterprise is co-operatively owned and provides not only convenience but worker protections.

It used to be only musicians comprised the "gig" economy. But there have always been self-employed people that worked gig to gig. Self-employed are the only really free people in the sense that they don't have to take orders from any boss, from any employer. If they want to take time off, the only person they need to consult is themselves. Especially if they have a large customer base, no single person or entity controls them. If they don't like a particular customer they can tell them to take a hike and vice versa. The power in the economy is equally distributed. This is the only really free market as far as workers are concerned. You don't have to kiss the boss's ass. And you can retire or not retire when you want to rather than when your boss tells you to. Did I mention that you can't be laid off, let go, downsized or outsourced?

Computer Technology Takes Self-Employment to the Next Level

Today computer technology takes self-employment to the next level, but it does not necessarily empower the worker in the gig economy. Uber has opened one door, but there are many other doors to be opened. Shift scheduling software for nurses has been in use for a few years. This technology can not only track each participant's schedule, but integrate those schedules so that necessary work is covered and everyone gets a fair shake. That means that no one is always scheduled for the night shift. Scheduling software then takes on a primary role in covering worker participation in such a way as the job or jobs get done. With Uber and Lyft there is no scheduling software per se. Everyone just works whenever they want so that at times there may be an oversupply of available drivers, and at other times there may be none available. Their software just tracks who has worked where and at what times as well as how many fares they've driven and for what amounts. They also set the price depending on demand, so-called dynamic pricing.

It's OK to price gouge the customer if demand is high, and multiple drivers are incentivized to drop what they're doing and pick up some fares. Similarly, when demand is low, the price comes down and customers are incentivized to hire an Uber even though there may be none available because drivers are disincentivized. Adjusting consumer and driver demand is a problem that supposedly Uber is in the process of solving. Supply and demand maladjustments are part and parcel of capitalism. They're a problem that capitalists seek to profit from rather than solve.

... providers don’t have to commit to full days of work. You can pick up your kids from school (and then switch to being an Uber driver). In the gig economy, the lines between personal and professional become increasingly blurred.

There’s certainly something empowering about being your own boss. With the right mindset, you can achieve a better work-life balance. But there’s also something empowering about a steady pay cheque, fixed work hours and company-provided benefits. It’s harder to plan your life longer term when you don’t know how much money you’re going to be making next year.

On the other hand, starting a new business has generally been an all-or-nothing proposition, requiring a significant appetite for risk. There are benefits to dipping your toes into the entrepreneurial waters by experimenting with a few gigs on the side. Perhaps this lowering of barriers to entrepreneurship will spur innovation across the economy.

Economist Thomas Piketty tells us that the main driver of sustained economic inequality over the past two centuries has been the concentration of wealth-producing “capital” in the hands of a few. This seems less likely if the economy is powered by millions of micro-entrepreneurs who own their businesses, rather than a small number of giant corporations.

But the latest generation of specialised labour platforms also raises the spectre of greater social inequality. We’ve now got apps through which providers will park your car (Luxe), buy and deliver your groceries (Instacart), and get you your drinks (Drizly). There’s a risk we might devolve into a society in which the on-demand many end up serving the privileged few.

In many countries, key slices of the social safety net are tied to full-time employment with a company or the government. Although the broader socioeconomic effects of the gig economy are as yet unclear, it is clear we must rethink the provision of our safety net, decoupling it from salaried jobs and making it more readily available to independent workers.

Shift Selection Software Allows Employees to Set Their Own Schedules

But there is another way of looking at the situation if Uber or something like Uber were to be a co-op instead of a corporation whose main concern was profits. What if prices for the consumer were held constant and drivers were incentivized to meet demand whatever that demand might be? With a co-op undesirable shifts might command a higher hourly paycheck and popular shifts might be paid at a lower hourly rate, but all would share in the profits commensurate with their total hours of work or participation. Software is smart enough to figure all this out. We don't have to hold on to the model of the 40 hour workweek for a corporate employer.

Worker protections ideally would be offered not by individual employers, but by society at large meaning the government. Universal health care would preempt workers' compensation insurance which would be moot. Family leave and vacations and whatever else is thought to be fair and desirable would presumably be offered in a co-op since it wouldn't be at odds with company profits which after all would be distributed among the workers according to some formula, but could be doubly guaranteed by society-at-large as well. There would be no conflict between workers and owners because the workers would be the owners so unions would be unnecessary. Call me a dreamer.

Politonomics is a methodology for deciding how to distribute work and compensation for work in such a way that maximizes worker satisfaction. The idea is not to maximize profits for shareholders or corporate CEOs and other executives, but how to maximize worker satisfaction which includes compensation for hours worked, worker protections and a share of the profits. The worker/owners would have democratic participation in decision making such as workers in German corporations have.

There is a clear legal basis in Germany for the workplace representation of employees in all but the very smallest companies. Under the Works Constitution Act, first passed in 1952 and subsequently amended, most recently in 2001, a works council can be set up in all private sector workplaces with at least five employees. (There is a system of staff councils in the public sector which have a broadly similar structure.)

Simply put, a cooperative is a special form of business owned and managed by the people who provide and/or use the goods and services that the business provides. They pool resources to satisfy a common need and provide these goods and services as economically and efficiently as possible. A co-op is owned by the people who use it.

As locally owned businesses, co-ops are committed to the people they serve and the communities they live in. Owners can have a voice in what is available for purchase, as well as in the overall organization of their particular co-op. Owners get the most buying power for their money, and the money stays in the community, contributing to its economic strength.

My interest began back in 1977, when a big steel company, Youngstown Sheet and Tube, went out of business. Five thousand people in Youngstown, Ohio, lost their jobs in one day, which was disastrous. Layoffs of that size are common today—especially when multinational corporations shift capital around—but in 1977 that was front-page, national news. It was a big, big deal.

But the community leaders and steel workers in Youngstown decided that they didn’t have to go down without a fight. They got together and built a coalition to buy the steel mill back and run it themselves, under worker-community ownership. They began organizing locally and statewide, and soon the Carter administration agreed to provide funds to hire experts who could help them with the mill’s technical designs.

New Models for Ownership and Employment

We have to think in terms of new models for ownership and for employment. Increasing economic inequality demands a solution.Co-ops are that solution. The old model of workers in competition with owners which gave rise to the union movement is or should be passe, and in its place should be a model in which workers are owners, unions are unnecessary and worker protections are guaranteed by the co-op itself and by society in general. The gig economy could be a good thing in terms of work schedule convenience and integration of work with other life enhancing and/or demanding activities.

Child care and elder care can be integrated into one's work schedule and time off is at the worker's scheduling disposal instead of being mandated as holidays or weekends or vacation by the corporate owners. Many workers would choose to take vacations when roads are less crowded than they are on mandated holidays. Today there is nothing sacrosanct about not working on Sunday or holidays as there used to be. The 40 hour work week should be a thing of the past with workers working as many hours as they choose on whatever days they choose without being exploited. Workers can set their own schedules and decide when their vacations should be instead of having to ask the permission of their bosses. And they wouldn't have to worry about their jobs being shipped to China.